LOSING YOUR LICENCE: AARTO AND THE APRIL FOOLS' DAY DEADLINE
A careful driver is one who has just spotted a speed camera!"
(Internet joke)
Will they, won't they? Confusion reigns (at date of writing anyway) over whether or not the AARTO driver demerit point system will be rolled out countrywide on 1 April. Given the chronic administrative issues that have plagued the pilot programmes so far, let's hope that the joke isn't on us if implementation does go ahead.
Unlucky 13 - don't lose your licence!
Anyone with 13 or more demerits will have their driver's licence/professional driving permit/operator card automatically suspended (3 months' suspension for every point over 12). And 3 suspensions will result in full cancellation.
You may think that 12 demerits will take the average driver a long time to accumulate, but consider the demerit points applicable to these sample offences (there are many thousands of them - the table below gives just a few examples):-
Businesses - are you ready?
In any event, start preparing now for the demerit system. Even if it is postponed yet again, businesses in particular need to manage the risk of their drivers repeatedly offending. Think about how you will monitor your drivers' demerit points, and whether your employment contracts are correctly structured to deal with the consequences if their licences are suspended or cancelled.
It's not all bad news - the silver lining
Law-abiding drivers will no doubt welcome the crackdown on serial traffic offenders, and the fine payment system - already in place in Joburg and Tshwane - has one significant perk for motorists in that it allows a 50% discount for early payment of fines.
You can also reduce any demerit points you may have accrued - I demerit point is taken away for every 3 months you remain offence-free.
DEVELOPERS - MAKE SURE YOU GET YOUR VAT RELIEF!
A major concession from SARS
Residential property developers - if you are stuck with empty houses because of the property slump you can now rent them out without triggering a deemed "change in use". That's a major concession, as such a change in use would make you liable to pay output VAT on the "deemed supply" of the property (based on its market value) - and that could mean a hefty drain on your cash flow at a very hard time in the property cycle.
But beware!
You will lose this benefit -
If you don't notify SARS in specified format within 30 days of commencing the rental supply, or
If your intention does in fact change from selling the development to holding it for rental, or
After 36 months - you will have to pay the tax then if your leases are for longer than 3 years.
Note also that the concession is temporary and ends on 1 January 2015.
THE NEW DIVIDENDS TAX: READ ALL ABOUT IT (AND A WARNING!)
From 1 April, STC (Secondary Tax on Companies) will be replaced by DT (Dividends Tax - which, just to confuse the issue, some commentators are calling "DWT" for "Dividend Withholding Tax").Regrettably, that hasn't lasted long. SARS has now won two further High Court cases on the same issue, and we revert to a situation where you just have to cough up when told to.
What changes?
The rate - 10% - increases to 15%.
Whereas STC is payable by a company when it declares a dividend, DT is payable by the shareholder receiving it. The company must withhold the tax, deduct it from the dividend, and pay it over to SARS on behalf of the shareholder.
Reduced rates and exemptions - under STC, exemptions were based on the status of the declaring company. Under DT, exemptions and reduced rates are based on the status of recipients. Thus various levels of exemption apply to dividend recipients who are (for example - this isn't a comprehensive list) local companies, approved Public Benefit Organisations, pension and similar funds, medical aids, and registered micro businesses (up to R200,000 p.a.), whilst some foreign shareholders will enjoy reduced rates. Warning: to secure your exemption you must notify the company paying out the dividend (in the prescribed format) before the dividend is paid.
Note: The above is of necessity just a brief overview. Take proper and specific advice on how the changes will affect you!
DEBT REVIEW: IS IT AN ACT OF INSOLVENCY?
The sequestration option
When dealing with a recalcitrant debtor who is clearly just playing for time, sequestrating his or her estate might be your best course of action (take advice in doubt).
To succeed, you must prove -
That you have a valid claim against the debtor, and
That the sequestration will be to the advantage of creditors, and
That the debtor is indeed "insolvent".
Note that you don't need to prove actual insolvency - just that the debtor has committed an "act of insolvency".
SALES BROCHURES - EMPTY PROMISES AND THE LAW
You buy into a Private Game Reserve scheme, looking forward to all the good things promised in the sales brochure - like viewing abundant game from your own personal safari vehicle before retiring to the communal clubhouse/wellness centre for a dip in the heated swimming pool and a workout in the gym.
But alas, three years down the line you still have no game drive vehicle and no wellness centre, and the amount of game has drastically decreased because the developer has been selling off game without consent from the body corporate. What can you do?
The CPA
Firstly, if the Consumer Protection Act ("CPA") applies to your case - and it's likely to where the seller is a developer - your position's probably strong. The CPA's requirements of "fair and honest dealing" and "fair and responsible" marketing (prohibiting "exaggeration, innuendo or ambiguity" and anything "misleading, fraudulent or deceptive in any way") make it essential for property sellers (and their agents) to ensure deliverability of all promises made in sales materials and negotiations.
The Court Case
Even if the CPA doesn't apply, a recent High Court case - in which the facts were more or less as set out above - illustrates the need for sellers to tread with care when preparing or approving sales brochures.
The Court in this case held that, although the agreement of sale itself imposed obligations on the developer only in regard to the vehicle and game numbers, and although it said nothing of the clubhouse/wellness centre, the undertaking in the sales brochure to provide such a centre was enforceable. The Court's finding - based partially on the wording of the brochure - was that the "common intention" of the parties was for the centre to be provided. The Court accordingly ordered rectification of the contract by importation of a clause to that effect.
SCHOOLS ADMISSION: GOVERNMENT HAS THE FINAL SAY
Commenting that: "…………the Constitution does not permit the interest of a few learners to override the right of all other learners in the area to receive a basic education", the High Court recently upheld a provincial education department's instruction to a public school to admit a learner to Grade 1 despite the school's assertion that it could not do so as it had reached its maximum capacity.
The public school in question had, in order to achieve a low learner to class ratio, raised "private funds" to build additional classrooms and to employ additional teachers - presumably any governing body with similar fundraising plans is going to be cautious in implementing them now (and should take specific advice in doubt).
The Court's key findings were to the effect that: -
A public school governing body does not have "unqualified power" to determine the school's admission policy.
The power to determine the maximum capacity of a public school lies with the local department of education and not the governing body.
The department has the power to intervene with the governing body's power to determine the admission policy of a public school.
(Note: Media reports indicate that the school intends to appeal the judgment)
THE MARCH WEBSITE: YOUR OWN BUSINESS WEBSITE - ABSOLUTELY FREE!
Where do potential customers looking for a product or service go to find it?
In the Internet Age, they search online - thousands of people, every hour of every day. And if your business isn't yet online, if you don't have at least a basic web presence in the form of a website, how are you going to create brand awareness and build up your customer base?
Your own bespoke website is always going to be first prize, but if you don't have the financial resources (or in-house expertise) to achieve that, here's some excellent news - you can quickly and easily create your own template-based website with minimal technical knowledge and zero cost. Online. In under an hour.
Go to Google's "South African Business Woza Online" site at www.wozaonline.co.za for -
A "Free Professional Website in Minutes"
A free sub-domain name and hosting
Tips and tools on how to improve and make the most of your site
Training and workshops
Free listing on Google Maps, Mobile Search and Google Earth
"Available Soon" according to the website will be - for the first 10,000 participants - a custom ".co.za" domain name, free for a year and thereafter R50 p.a.
Have a Great March!
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
A careful driver is one who has just spotted a speed camera!"
(Internet joke)
Will they, won't they? Confusion reigns (at date of writing anyway) over whether or not the AARTO driver demerit point system will be rolled out countrywide on 1 April. Given the chronic administrative issues that have plagued the pilot programmes so far, let's hope that the joke isn't on us if implementation does go ahead.
Unlucky 13 - don't lose your licence!
Anyone with 13 or more demerits will have their driver's licence/professional driving permit/operator card automatically suspended (3 months' suspension for every point over 12). And 3 suspensions will result in full cancellation.
You may think that 12 demerits will take the average driver a long time to accumulate, but consider the demerit points applicable to these sample offences (there are many thousands of them - the table below gives just a few examples):-
Businesses - are you ready?
In any event, start preparing now for the demerit system. Even if it is postponed yet again, businesses in particular need to manage the risk of their drivers repeatedly offending. Think about how you will monitor your drivers' demerit points, and whether your employment contracts are correctly structured to deal with the consequences if their licences are suspended or cancelled.
It's not all bad news - the silver lining
Law-abiding drivers will no doubt welcome the crackdown on serial traffic offenders, and the fine payment system - already in place in Joburg and Tshwane - has one significant perk for motorists in that it allows a 50% discount for early payment of fines.
You can also reduce any demerit points you may have accrued - I demerit point is taken away for every 3 months you remain offence-free.
DEVELOPERS - MAKE SURE YOU GET YOUR VAT RELIEF!
A major concession from SARS
Residential property developers - if you are stuck with empty houses because of the property slump you can now rent them out without triggering a deemed "change in use". That's a major concession, as such a change in use would make you liable to pay output VAT on the "deemed supply" of the property (based on its market value) - and that could mean a hefty drain on your cash flow at a very hard time in the property cycle.
But beware!
You will lose this benefit -
If you don't notify SARS in specified format within 30 days of commencing the rental supply, or
If your intention does in fact change from selling the development to holding it for rental, or
After 36 months - you will have to pay the tax then if your leases are for longer than 3 years.
Note also that the concession is temporary and ends on 1 January 2015.
THE NEW DIVIDENDS TAX: READ ALL ABOUT IT (AND A WARNING!)
From 1 April, STC (Secondary Tax on Companies) will be replaced by DT (Dividends Tax - which, just to confuse the issue, some commentators are calling "DWT" for "Dividend Withholding Tax").Regrettably, that hasn't lasted long. SARS has now won two further High Court cases on the same issue, and we revert to a situation where you just have to cough up when told to.
What changes?
The rate - 10% - increases to 15%.
Whereas STC is payable by a company when it declares a dividend, DT is payable by the shareholder receiving it. The company must withhold the tax, deduct it from the dividend, and pay it over to SARS on behalf of the shareholder.
Reduced rates and exemptions - under STC, exemptions were based on the status of the declaring company. Under DT, exemptions and reduced rates are based on the status of recipients. Thus various levels of exemption apply to dividend recipients who are (for example - this isn't a comprehensive list) local companies, approved Public Benefit Organisations, pension and similar funds, medical aids, and registered micro businesses (up to R200,000 p.a.), whilst some foreign shareholders will enjoy reduced rates. Warning: to secure your exemption you must notify the company paying out the dividend (in the prescribed format) before the dividend is paid.
Note: The above is of necessity just a brief overview. Take proper and specific advice on how the changes will affect you!
DEBT REVIEW: IS IT AN ACT OF INSOLVENCY?
The sequestration option
When dealing with a recalcitrant debtor who is clearly just playing for time, sequestrating his or her estate might be your best course of action (take advice in doubt).
To succeed, you must prove -
That you have a valid claim against the debtor, and
That the sequestration will be to the advantage of creditors, and
That the debtor is indeed "insolvent".
Note that you don't need to prove actual insolvency - just that the debtor has committed an "act of insolvency".
SALES BROCHURES - EMPTY PROMISES AND THE LAW
You buy into a Private Game Reserve scheme, looking forward to all the good things promised in the sales brochure - like viewing abundant game from your own personal safari vehicle before retiring to the communal clubhouse/wellness centre for a dip in the heated swimming pool and a workout in the gym.
But alas, three years down the line you still have no game drive vehicle and no wellness centre, and the amount of game has drastically decreased because the developer has been selling off game without consent from the body corporate. What can you do?
The CPA
Firstly, if the Consumer Protection Act ("CPA") applies to your case - and it's likely to where the seller is a developer - your position's probably strong. The CPA's requirements of "fair and honest dealing" and "fair and responsible" marketing (prohibiting "exaggeration, innuendo or ambiguity" and anything "misleading, fraudulent or deceptive in any way") make it essential for property sellers (and their agents) to ensure deliverability of all promises made in sales materials and negotiations.
The Court Case
Even if the CPA doesn't apply, a recent High Court case - in which the facts were more or less as set out above - illustrates the need for sellers to tread with care when preparing or approving sales brochures.
The Court in this case held that, although the agreement of sale itself imposed obligations on the developer only in regard to the vehicle and game numbers, and although it said nothing of the clubhouse/wellness centre, the undertaking in the sales brochure to provide such a centre was enforceable. The Court's finding - based partially on the wording of the brochure - was that the "common intention" of the parties was for the centre to be provided. The Court accordingly ordered rectification of the contract by importation of a clause to that effect.
SCHOOLS ADMISSION: GOVERNMENT HAS THE FINAL SAY
Commenting that: "…………the Constitution does not permit the interest of a few learners to override the right of all other learners in the area to receive a basic education", the High Court recently upheld a provincial education department's instruction to a public school to admit a learner to Grade 1 despite the school's assertion that it could not do so as it had reached its maximum capacity.
The public school in question had, in order to achieve a low learner to class ratio, raised "private funds" to build additional classrooms and to employ additional teachers - presumably any governing body with similar fundraising plans is going to be cautious in implementing them now (and should take specific advice in doubt).
The Court's key findings were to the effect that: -
A public school governing body does not have "unqualified power" to determine the school's admission policy.
The power to determine the maximum capacity of a public school lies with the local department of education and not the governing body.
The department has the power to intervene with the governing body's power to determine the admission policy of a public school.
(Note: Media reports indicate that the school intends to appeal the judgment)
THE MARCH WEBSITE: YOUR OWN BUSINESS WEBSITE - ABSOLUTELY FREE!
Where do potential customers looking for a product or service go to find it?
In the Internet Age, they search online - thousands of people, every hour of every day. And if your business isn't yet online, if you don't have at least a basic web presence in the form of a website, how are you going to create brand awareness and build up your customer base?
Your own bespoke website is always going to be first prize, but if you don't have the financial resources (or in-house expertise) to achieve that, here's some excellent news - you can quickly and easily create your own template-based website with minimal technical knowledge and zero cost. Online. In under an hour.
Go to Google's "South African Business Woza Online" site at www.wozaonline.co.za for -
A "Free Professional Website in Minutes"
A free sub-domain name and hosting
Tips and tools on how to improve and make the most of your site
Training and workshops
Free listing on Google Maps, Mobile Search and Google Earth
"Available Soon" according to the website will be - for the first 10,000 participants - a custom ".co.za" domain name, free for a year and thereafter R50 p.a.
Have a Great March!
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
IN THIS ISSUE - MARCH 2012